Egg director defends IT system

Egg has defended its choice of technology for its ecommerce activities despite embarrassing hiccups in launching products.

Last month customers applying for Egg's Internet credit card experienced delays, and successful applicants were later disappointed on discovering they could not service their new credit card. Similarly, last year the launch of the Egg bank was swamped by the overwhelming demand.

The infrastructure of Prudential's banking arm is based on two large Sun servers, an Oracle database, and software from Netscape and content management specialist Vignette.

Industry experts have suggested that Egg would have avoided technical glitches if it had invested in several smaller servers that could be easily added in the face of unprecedented demand, instead of being stuck with big Unix mainframes.

Pete Marsden, the bank's IT director, said: "There are two paradigms. One where you have lots of servers, which is the Microsoft approach; or, as we have chosen, a single investment in large technologies."

"Managing the connectivity between several servers is like throwing a tennis ball between lots of people. You can keep it in the air when there are just two or three, but when you have over six there are likely to be a lot of dropped balls."

Marsden said the Egg system can scale up very quickly and is "low cost, low maintenance."

"Ebay started small and added on and on and eventually fell over. That takes a long time to recover from."

Choosing Sun Connect architecture over Microsoft and IBM was done because "it's right for ecommerce. The AS400 is appropriate for back-end manufacturing systems, not for ecommerce or hosting websites."

Marsden said problems with the Internet credit card launch caused by Egg failing to use its main 8Mbps link to its Internet service provider and depending on its 4Mbps backup, has taught Egg lessons.

"We are learning all the time," he said. "Because the technology is new, we must constantly monitor it, and we will improve how we release future products."

The next major Egg product will be "a fun supermarket in the investment area," said Marsden.

"Customers will be able to buy products such as unit trusts, shares and ISAs from different companies. The service will be comparative and we will offer extremely competitive rates. It will cut down on the laborious process of buying stocks and shares."

Marsden is apologetic to customers who experienced problems with the site, but said foregoing a smooth launch is "a trade-off between getting a product to market and getting every ironed problem out."

"We do feel disappointed when we let customers down," he said.

Speed is the essence of Egg, a product that had a development life cycle of 50 days last year, but "we can bring a product to market in two days if we want," Marsden added.

"Most people in the business world don't believe it."

Despite Egg's extensive coverage and its 650,000 customers, it is still making a loss, but "we're on track to break even in 2001," he said.

Egg can yoke further popularity before it has to shell out on more technology: "We have the capacity to expand to two million customers," said Marsden. "We have made our main capital purchase for this year and the next."

Analyst opinion is on Egg's side. Butler Group said: "The Egg card, with its Internet fraud guarantee, is likely to be a big hit with individuals looking for additional reassurances before indulging in ecommerce.

"Egg is forging its own paths into the ecommerce jungle, and is consequently finding differentiation and free PR by the bucketload."